With so many opinions floating around about why and how to bootstrap a startup, we often overlook what not to do when going this route. You’re going to make a lot of mistakes going forward, and that’s ok.
If you avoid these major blunders from the start, your journey will be a bit less bumpy.
1. Don’t Forget to Budget
Learning how to bootstrap a startup looks different for different people depending on a variety of factors — the amount of money you are (or aren’t) starting off with, whether you’re still working full-time, if you’re flying solo or have a co-founder. All these factors contribute to what your experience will look like. But regardless of the money you have at your disposal, you need to budget your funds. Yes, creating a business plan is important, but while you’re doing that (or soon after), you need to budget your personal life. If you’re not flush with cash, it’s important to figure out where the money for your business is going to come from.
There are a million different ways you can budget your personal life to help spur on the professional you. Regardless of whether this is renting out a spare room on Airbnb or cutting back on shopping or rent, you need to know monthly, what is coming in, what is going toward your business, and what is left for living life. If you need help budgeting yourself, there are apps to help you.
2. Don’t Go it Alone
Now before I start taking slack for implying that going solo is a bad idea, hear me out, this is, after all, an article about how to bootstrap a startup. And if you’re already in the thick of startup mode, you know very well how hard it is. Adding the additional layer of bootstrapping your startup can make it all the more challenging. So why not take on a co-founder? There are dozens of reason why you should, including splitting the cost. If it’s the difference between starting a business and not starting a business, you should give it some thought. Beyond being able to split roles and responsibilities while gaining complementary skills, you’re only taking on half of the financial risk, which for many can be a deciding factor.
3. Don’t Take “No” For an Answer
When money is tight, everything takes on an added sense of urgency. When you only have enough money to last you six months (opposed to a year or two), getting a “yes” from a potential client, customer or supplier is crucial. That’s why not taking “no” for an answer (at least not right away) needs to be your new life mantra. Start thinking of a “no” as a “maybe.” Just because someone didn’t like your product the first go-round or thought your website wouldn’t take off when they saw it in beta doesn’t mean that two iterations down the road they won’t love it.
Stay in touch, reach back out, and make the ‘ask’ again. This time, try and provide some additional value on their behalf, whether that is an intro to someone in their industry or a free sample you deliver to their door. The important thing is to stay top-of-mind and convince that you are worth their time, money or investment.
When you’re small with no brand recognition, you’re going to getting a lot of what I’d call the “oh, isn’t that cute!” look. Ignore it, don’t let it get you down, and keep pitching. Confidence in yourself and your business is something everyone will respect. Once they get past the fact that they’ve never heard of you before, they’ll be pleasantly surprised at what you have to offer.
4. Don’t Not Take Risks
Just because you’re bootstrapping your startup doesn’t mean you shouldn’t take risks. You just need to choose those risks wisely. As we know, if the risk is money-related and it goes south, you’re the one left holding the bag. So make smart, well-educated decisions when deciding what basket to put your eggs in. A good way to evaluate whether a risk is worth taking is to think about what will happen if you don’t take it. Will your progress be held back by months, potentially years? If the answer is yes, then that risk might be one you potentially want to take. If not taking that risk will prevent you from jump-starting your business and ultimately being successful, then go for it.
5. Don’t Use Your Credit Card
So there are really two parts to this. I’m not saying to never use a credit card while bootstrapping your startup. But, business credit cards are one thing; personal credit cards are a whole different ballgame. There are a variety of benefits to using business credit cards. They often offer higher credit limits and have perks such as discounts on travel. It’s also important to establish your new business’ line of credit as soon as possible. This will help you down the road if you do ever decide to take out a business loan.
But what I’m talking about here is not using your personal credit card to fund your business. This has “no, no, no” written all over it. It’s a major lesson when learning how to bootstrap your startup, one that should not be ignored. If you wind up charging too much on your personal credit card, no one is going to care that the debt was actually for your business. If you can’t pay back that credit card and your credit is shot, when you go to take out a personal loan for a home or car, a bank is not going to care. On the flip side, I’m not saying never to use your personal credit card. It’s ok when you first start out, charging a few hundred here or there, as long as you know you can pay it back. But once you get into the thousands mark, it will behoove you to apply for that business credit card.
If you’re disheartened by hearing all the ‘what not’ to do as you learn how to bootstrap your startup, don’t be. Remember, bootstrapping your startup means maintaining complete ownership of the thing that matters most to you. And at the end of the day, having complete control over your business is a liberating option. Being careful, smart and a little cautious in the beginning will be worth the effort in the long run.